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And yet the site apparently continues to accept deposits: https://celsius.network https://celsius.network Business as usual. Oh yeah, check out our hello bar

And yet the site apparently continues to accept deposits: https://celsius.network https://celsius.network Business as usual. Oh yeah, check out our hello bar for that minor detail that withdrawal, swap, and transfers are "currently paused." These guys are going to prison.

adrr 4y ago
People were still buying hertz stock even though they were going through bankruptcy. They even tried to do secondary offering. Retail investors don’t operate with enough information to make financially sound decisions.
- Dylan16807 4y ago
  And those people might have been right??
- modeless 4y ago
  That's the worst possible example since the retail investors were proven right about Hertz...
civilized 4y ago
Currently paused due to "extreme market conditions". What conditions exactly? BTC is down from all-time high, but still worth about twice as much as it was only two years ago. Ethereum is worth over 4x as much. Is a two-year average appreciation rate of 40-100% per year so witheringly horrible that the Celsius business model couldn't survive it? Did crypto have to basically 2x every year without fail for Celsius to survive?
- wmf 4y ago
  When everybody piles in near the all-time high then wants to cash out at the bottom, the two-year return becomes irrelevant.
  - civilized 4y ago
    That depends on what you're doing. If I put my life's savings into the S&P 500 at 2x leverage in 2008, I'd be wiped out in 2009. But that would be an extremely dumb thing to do.
- josh2600 4y ago
  Celsius told their customers they were accruing Bitcoin and then Celsius didn’t buy the Bitcoin to deposit into their accounts, instead using the money to buy their CEL token that their ceo was dumping on exchange. Their business model was fine. What wasn’t fine was not following it. Abra, Nexo, Gemini, and lots of other companies are business as usual with the same model right now.
  - civilized 4y ago
    This is informative, but I'm not sure how illuminating it is to say that a business's business model was great, except they didn't follow it, they followed a completely different business model that was terrible? Isn't the actual business model of a business... the business model that they actually followed?
    - dmd 4y ago
      If I build you a model of a building that's fine, and then I build a building that isn't like the model, I think it's reasonable to still say that the model was fine.
      - civilized 4y ago
        Point taken, but I'd say it gets a bit murky when I find out you built the building based on a different model you didn't show me. A lot depends on whether the "business model" presented publicly was deceptive.
  - im_down_w_otp 4y ago
    How in God's name are there so many of these crypto companies? This post has 3 that I've never heard of, and the rest of this thread probably has a dozen more. Is the startup cost of these things near zero or something?
  - Gigachad 4y ago
    Why are the people behind these companies not in jail?
danuker 4y ago
They assumed collateral would hold 25% of its initial value until the end of the loan. In the past 12 years, Bitcoin lost 80%+ of its market value. Three times. It came back before, so they might become solvent again eventually. But this was bad risk management.
everfree 4y ago
The site is not actively accepting deposits. Did you assume that it was, based on something you saw there? Read this passage from Alex Mashinsky's bankruptcy affidavit: > Importantly, however, shortly after the Pause Date, on June 18, 2022, Celsius made the necessary changes to the Celsius App to prevent any new users from generating a deposit address and thus being able to deposit cryptocurrency on the Celsius platform. Moreover, as of the Petition Date, new users are prevented from even registering for a Celsius Account. Celsius can't prevent people from sending crypto to addresses that Celsius controls, but that's a whole different story from "continuing to accept deposits."
- gcr 4y ago
  If Celsius is accepting deposits on existing addresses, they are continuing to accept deposits that they know their customers can't access. Celsius designed the system without an off switch because DeFi systems generally view that as an anti-feature, but that means that they probably aren't able to be compliant with the bankruptcy affidavit. You yourself wrote that they "can't prevent" deposits for existing accounts. It's very pertinent.
  - everfree 4y ago
    > If Celsius is accepting deposits on existing addresses, they are continuing to accept deposits that they know their customers can't access. Did you read the affidavit? Your argument is specifically pre-empted and refuted: > It is important to understand that users transfer their digital assets from external “wallets” to the Celsius platform by recording such transactions on the blockchain. These transfers are entirely user driven with no ability for Celsius to “approve” or “deny” a transfer to its platform. This is a feature of the underlying blockchain infrastructure and cannot be technically changed or otherwise prevented. It is impossible to create, for example, a Bitcoin address that has an "off switch" that will prevent people from sending additional bitcoins to it. It's a feature that most blockchains simply do not support. In other words, Celsius did not "design the system without an off switch." Satoshi Nakamoto designed Bitcoin without an off switch.
    - 4y ago
coffee_beqn 4y ago
I’m getting a popover saying they’ve filed for chapter 11 when I open that
faangiq 4y ago
Fleecing non-Israelis is legal in Israel.

adrr 4y ago

People were still buying hertz stock even though they were going through bankruptcy. They even tried to do secondary offering. Retail investors don’t operate with enough information to make financially sound decisions.

Dylan16807 4y ago
And those people might have been right??
modeless 4y ago
That's the worst possible example since the retail investors were proven right about Hertz...

civilized 4y ago

Currently paused due to "extreme market conditions". What conditions exactly? BTC is down from all-time high, but still worth about twice as much as it was only two years ago. Ethereum is worth over 4x as much. Is a two-year average appreciation rate of 40-100% per year so witheringly horrible that the Celsius business model couldn't survive it? Did crypto have to basically 2x every year without fail for Celsius to survive?

wmf 4y ago
When everybody piles in near the all-time high then wants to cash out at the bottom, the two-year return becomes irrelevant.
- civilized 4y ago
  That depends on what you're doing. If I put my life's savings into the S&P 500 at 2x leverage in 2008, I'd be wiped out in 2009. But that would be an extremely dumb thing to do.
josh2600 4y ago
Celsius told their customers they were accruing Bitcoin and then Celsius didn’t buy the Bitcoin to deposit into their accounts, instead using the money to buy their CEL token that their ceo was dumping on exchange. Their business model was fine. What wasn’t fine was not following it. Abra, Nexo, Gemini, and lots of other companies are business as usual with the same model right now.
- civilized 4y ago
  This is informative, but I'm not sure how illuminating it is to say that a business's business model was great, except they didn't follow it, they followed a completely different business model that was terrible? Isn't the actual business model of a business... the business model that they actually followed?
  - dmd 4y ago
    If I build you a model of a building that's fine, and then I build a building that isn't like the model, I think it's reasonable to still say that the model was fine.
    - civilized 4y ago
      Point taken, but I'd say it gets a bit murky when I find out you built the building based on a different model you didn't show me. A lot depends on whether the "business model" presented publicly was deceptive.
- im_down_w_otp 4y ago
  How in God's name are there so many of these crypto companies? This post has 3 that I've never heard of, and the rest of this thread probably has a dozen more. Is the startup cost of these things near zero or something?
- Gigachad 4y ago
  Why are the people behind these companies not in jail?

danuker 4y ago

They assumed collateral would hold 25% of its initial value until the end of the loan. In the past 12 years, Bitcoin lost 80%+ of its market value. Three times. It came back before, so they might become solvent again eventually. But this was bad risk management.

everfree 4y ago

The site is not actively accepting deposits. Did you assume that it was, based on something you saw there? Read this passage from Alex Mashinsky's bankruptcy affidavit: > Importantly, however, shortly after the Pause Date, on June 18, 2022, Celsius made the necessary changes to the Celsius App to prevent any new users from generating a deposit address and thus being able to deposit cryptocurrency on the Celsius platform. Moreover, as of the Petition Date, new users are prevented from even registering for a Celsius Account. Celsius can't prevent people from sending crypto to addresses that Celsius controls, but that's a whole different story from "continuing to accept deposits."

gcr 4y ago
If Celsius is accepting deposits on existing addresses, they are continuing to accept deposits that they know their customers can't access. Celsius designed the system without an off switch because DeFi systems generally view that as an anti-feature, but that means that they probably aren't able to be compliant with the bankruptcy affidavit. You yourself wrote that they "can't prevent" deposits for existing accounts. It's very pertinent.
- everfree 4y ago
  > If Celsius is accepting deposits on existing addresses, they are continuing to accept deposits that they know their customers can't access. Did you read the affidavit? Your argument is specifically pre-empted and refuted: > It is important to understand that users transfer their digital assets from external “wallets” to the Celsius platform by recording such transactions on the blockchain. These transfers are entirely user driven with no ability for Celsius to “approve” or “deny” a transfer to its platform. This is a feature of the underlying blockchain infrastructure and cannot be technically changed or otherwise prevented. It is impossible to create, for example, a Bitcoin address that has an "off switch" that will prevent people from sending additional bitcoins to it. It's a feature that most blockchains simply do not support. In other words, Celsius did not "design the system without an off switch." Satoshi Nakamoto designed Bitcoin without an off switch.
  - 4y ago

coffee_beqn 4y ago

I’m getting a popover saying they’ve filed for chapter 11 when I open that

faangiq 4y ago

Fleecing non-Israelis is legal in Israel.